Bitcoin and gold rise to record levels - Currency depreciation pushes investors towards stable assets
The weakening dollar and record Bitcoin price have led investors to look for other assets to protect themselves from the collapse of currencies in 2025.
Bitcoin hit another record high, surging above $125,000 over the weekend. Gold is also shining, approaching a new record near $3,900 an ounce, while silver continues its rise into 2025. This is being fueled by growing concerns about the fiscal deficit and renewed doubts about the strength of the US dollar, which has lost about 10% of its value this year.
The recent moves are part of what traders call the "anti-devaluation trade," according to which durable assets will outperform currencies in an era of rising government debt and persistent inflation.
The anti-devaluation trade emerged late last year and has accelerated in recent months, according to strategists at major banks. With global debt levels rising and central banks continuing to cut interest rates despite persistent inflation, many investors are reconsidering their faith in paper money.
This has revived demand for traditional safe havens like gold, but also for alternatives like Bitcoin, often called “digital gold.” JPMorgan analysts say Bitcoin may be undervalued by up to 40% compared to gold, suggesting potential upside to around $165,000 if current trends continue.
While gold remains a preferred safe haven for many conservative investors, the growing acceptance of Bitcoin has expanded its store of value options. Both assets have benefited from what some analysts describe as a “loss of confidence in currency management,” especially with the U.S. deficit remaining well above historical averages.
Bitcoin's rapid rise to record levels, coupled with gold's extraordinary progress, demonstrates a deep investor appetite for rare assets in an era of monetary expansion. The continuation of this "trade against depreciation" will depend on inflation trends, fiscal discipline, and investor confidence in central banks.
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